Swiss Treaty Aims to Limit Offshore Tax Evasion

The U.S. Treasury has announced an agreement with Switzerland to amend the Swiss U.S tax treaty to allow the U.S. to more easily locate those engaged in tax fraud and tax evasion. The Swiss – U.S. treaty would be amended to comply with Article 26 of the Organization for Economic Co-operation and Development (OECD) Model Income Tax Convention. Treasury Secretary Tim Geithner stated “This Administration is committed to reducing offshore tax evasion to help ensure that all U.S. taxpayers are playing by the same rules. “This treaty will increase our ability to enforce our tax laws and will help bring an end to an era of offshore accounts and investments being used for tax evasion.”

The treaty must still be approved by the Swiss Parliament. At this point it is not known what effect this will have on the UBS summons enforcement action in Florida in which the Internal Revenue Service is attempting to obtain the names of over 50,000 UBS customers with offshore accounts who may have committed tax fraud or tax evasion.